Reform isn’t impacting employer-sponsored coverage

A new study finds employer-sponsored health plans aren’t going anywhere—at least for another few years.

Amid the debate over what impact the Patient Protection and Affordable Care Act will have on employee health coverage, the survey out from the Midwest Business Group on Health found employers say it will be “business as usual in their approaches to health benefits.”

The group polled employers around the country to gather information on their strategic thinking in planning for 2013-2018 to prepare and position their organizations for complying with the PPACA now that it’s been upheld by the Supreme Court. Employer size of those surveyed ranged from companies with more than 5,000 employees, to mid-size companies with 1,001 to 5,000 workers and smaller companies with fewer than 1,000 workers.

“Employers still believe that health benefits are vital to attract talented employees and maintain a productive workforce,” says Scott Thompson, president healthcare practice of The Benfield Group, the health care market research firm that collaborated on the survey. “This research found that most employers—especially those with more than 200 employees—will not drop employee benefit coverage in the foreseeable future.”

But that doesn’t mean employers aren’t making other arrangements to cut costs.

“They’ll control costs in other ways like implementing CDHPs, basing premium contributions on the number of dependents covered (unit pricing) and reducing benefits to avoid the Cadillac tax. Employers will continue to be active purchasers of health care,” Thompson says.

The survey found that in preparation for the 2018 40 percent excise tax on high cost “Cadillac” plans, 31 percent of employers indicated they plan to reduce their benefits in 2014-2016, with 41 percent responding they will do so for 2017-2018.

Costs will also go up as many move to consumer-driven health plans. More than half of employers (57 percent) say they currently offer CDHPs, such as health savings accounts and health reimbursement accounts, but that percentage will rise to 62 percent in 2013 and continue to rise steadily to 71 percent through 2018, the survey finds. More than a quarter (29 percent) of all employers will make their CDHP offering their only plan available to employees by 2018.

That echoes other research showing the rise of consumer-driven plans. Last month, Aon Hewitt researchers said CDHPs have surpassed health maintenance organizations to become the second most common plan design offered by U.S. employers.

MBGH CEO and President Larry Boress says employers are embracing for the upcoming additional changes of the law.

“After 2013, the majority of employers responded that they will be adjusting to the ‘new normal,’ making changes to their benefit design strategy in response to the post-ACA environment. The majority plan to continue to offer benefits.”